What Happened Last Week?
Uneventful Week. How About the Next One?
Sure… rates moved a bit higher last week as the bond market continued the process of a modest correction against the Nov/Dec exuberance. But Nov/Dec was just that: exuberant. Most of it was justified, but things got a bit too optimistic by the time the Fed’s dot plot came out. Moreover, additional gains would have required the type of economic data that just wasn’t seen over the past 4 weeks. With all that in mind, what is the Fed going to be able to say to surprise us this week? Probably not much, but markets will immediately begin extrapolating any big beats/misses in the big economic reports to its assessment of what the Fed will say next time.
Source: Matthew Graham, Mortgage News Daily 1/19/2024)
What’s on the Agenda for this Week?
Three Things
The three areas that have the greatest ability to impact MBS backend pricing this week are: (1) The Talking Fed, (2) Jobs, Jobs, Jobs and (3) Central Bank Palooza.
(1) The Talking Fed: The Fed’s latest FOMC Interest Rate Decision and Policy Statement will be issued Wednesday at 2 pm ET followed by a live presser with Fed Chair Powell.
(2) Jobs, Jobs, Jobs: There is a ton of job and wage related data all throughout the week culminating in Big Jobs Friday. They include employment components in ISM as well as Unit Labor Costs, Employment Cost Index, ADP, JOLTS, Weekly Claims, Challenger Job Cuts, Non Farm Payrolls, Unemployment Rate, Average Hourly wages and more.
(3) Central Bank Palooza: There will be an important Interest Rate Decision and Policy Statement out of the Bank of England.
Market Wrap-up
Domestic Flavor
There were no economic events today.
On Deck for Tomorrow: The FOMC starts two days of meetings, Consumer Confidence, JOLTS, FHFA House Price Index, Case Shiller Home Price Index.